What are uninsured and underinsured insurance policies?

Many Arizona residents who are involved in a car accident are able to recoup their financial losses simply by filing a claim with their insurance company. However, many motorists on the road are uninsured or underinsured. When these individuals cause an accident, victims can be left in a precarious financial position because, without additional action, they will be personally responsible for their losses.

There are, of course, ways to prevent being hit with these unexpected costs. One of the best ways is to secure uninsured and/or underinsured motorist coverage through one’s insurance company. Arizona law requires all insurance companies to offer this coverage to policy holders, which breaks down into three types.

The first type of extended coverage is uninsured motorist coverage to address property damage. As its name implies, this type of coverage will allow an accident victim to recover compensation for property damages caused by an uninsured motorist. Second, Arizona residents can choose to purchase coverage for instances in which underinsured motorists cause injury. This protection plan will compensate a car accident victim for financial damages associated with an injury, such as medical expenses and lost wages.

Lastly, a general underinsured motorist coverage plan can be purchased. Here, one’s insurance company will cover the difference between the negligent party’s policy limit and actual damages. Of course, recovering money through your insurance policy requires a finding that you were not at fault, or were at least less at fault than the other party involved. These extended policies can be expensive, too, meaning that many Arizona residents don’t have them. However, this does not mean that they are left without options in the aftermath of an accident. Those who are harmed in an accident caused by the negligence of another can turn to insurance companies for assistance, but they may also pursue a personal injury lawsuit when insurance is missing or is inadequate.